June 2006

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MEDIA OWNERSHIP DAY
Big-Media Critics Needn't Worry So Much
FCC Commissioners Want Media-Ownership Debate To Include Localism
AFTRA Lobbies FCC on Ownership
Time to StopBigMedia, Say Activists
Disarray in Auction of Univision

TELEVISION
Consultants see TV ad dollars growing 7% a year
McCain Links a la Carte to Broadcast Flag
White House Nominates Three To CPB Board
Louisiana Passes Franchise-Reform Bill

INTERNET
'Neutrality' regulations could stifle evolution of high-speed Internet
CDT Paper Calls For Narrowly Tailored Internet Neutrality Legislation
MySpace to Add Restrictions to Protect Younger Teenagers

QUICKLY -- FCC Proposes Disaster Readiness=20
Checklist; Upton: Is Universal Service Fund Still=20
Needed?; CARU Asks LEGO To Modify TV Ads; 37% of=20
EU citizens lack computer skills; Cubs Win!

MEDIA OWNERSHIP DAY

BIG-MEDIA CRITICS NEEDN'T WORRY SO MUCH
[SOURCE: Wall Street Journal, AUTHOR: Alan Murray]
[Commentry] For those who worry about the=20
pernicious effects of "big media," today is a big=20
day. The Federal Communications Commission once=20
again is launching an effort to ease rules that=20
restrict media concentration, including one that=20
prohibits newspapers and broadcast stations in=20
the same city from owning each other. The rules=20
were written back when "cable" was used to tow=20
cars and "the net" went next to the fishing box.=20
Opponents launched a pre-emptive attack against=20
the FCC yesterday, unveiling a new Web site,=20
StopBigMedia.com. Backed by groups ranging from=20
the Consumer Federation of America to the=20
National Council of Churches, the coalition urges=20
visitors to "fight back" and help "save your=20
local media from corporate control." Murray=20
writes that he will not sign up. "On the list of=20
things that keep me awake at night, "media=20
concentration" ranks pretty low. "Media=20
proliferation," on the other hand, ranks higher.=20
I am perplexed by the amazing array of ways that=20
purveyors of media have found to get inside my=20
head and, even more so, the heads of my teenage=20
daughters. The girls take it in over their iPods=20
and cellphones and satellite radio, or via=20
computer from sites such as MySpace and YouTube=20
(where even folks my age can enjoy Connie Chung's=20
bizarre farewell performance on cable channel=20
MSNBC.)" There is far more competition in the=20
media industry than in, say, the automobile=20
industry or the soft-drink industry or a dozen=20
other industries. The reality is this: Access to=20
the media is more open and democratic today than=20
it ever has been in the history of the world.
http://online.wsj.com/article/SB115085009329185821.html?mod=3Dtodays_us_...
e_one
(requires subscription)

FCC COMMISSIONERS WANT MEDIA-OWNERSHIP DEBATE TO INCLUDE LOCALISM
[SOURCE: Dow Jones, AUTHOR: Siobhan Hughes]
FCC Commissioners Jonathan Adelstein and Michael=20
Copps are asking Chairman Kevin Martin to address=20
the issue of promoting local programming when he=20
takes a first step this week to change=20
media-ownership rules. Under former FCC Chairman=20
Michael Powell, the agency set up a task force to=20
make recommendations. The effort, however,=20
languished, and the agency never proposed any=20
rules. Now, Commissioners Copps and Adelstein are=20
asking that the localism proceeding be wrapped up=20
-- with recommendations and final rules -- before=20
or when media-ownership regulations are=20
finalized. The commissioners see the two issues=20
as intertwined partly because of concerns that=20
the consolidation of media ownership in the hands=20
of a few large companies has diminished local=20
programming. They are pushing Chairman Martin to=20
resolve all of its media-ownership rules as part=20
of a single package rather than on a piecemeal=20
basis. They also want to make sure that the FCC=20
issues specific, detailed proposals before=20
finalizing its rules rather than rushing ahead to=20
approve rules without going through a full=20
rule-making process. The push to take up the=20
subject of local programming comes amid concerns=20
that Chairman Martin may try to rush through new=20
media-ownership rules. He is circulating a=20
proposal that would give the public 45 days to=20
comment on changing media- ownership rules, with=20
another 15 days for replies, according to two FCC=20
officials. That is considered to be much less=20
time than allotted for non- controversial=20
proposals, raising concern that the agency may act hastily.
http://news.morningstar.com/news/DJ/M06/D19/200606191624DOWJONESDJONLINE...
603.html?Cat=3DWashWire
* Will Localism Get New FCC Vote?
http://billboardradiomonitor.com/radiomonitor/news/business/leg_reg/arti...
_display.jsp?vnu_content_id=3D1002690576

AFTRA LOBBIES FCC ON OWNERSHIP
[SOURCE: Back Stage, AUTHOR: Andrew Salomon]
The American Federation of Television and Radio=20
Artists is calling for the Federal Communications=20
Commission to have greater "openness and=20
transparency" when the agency considers revising=20
media ownership rules, the union's chief=20
political lobbyist said Monday. AFTRA has been=20
fighting media consolidation because it can have=20
a negative affect on its members' jobs, according=20
to Thomas R. Carpenter, the union's director of=20
legislative affairs. "When ownership becomes more=20
and more centralized, there's a disincentive to=20
provide new work opportunities," he said. He=20
cited the example of two all-news radio stations=20
in Chicago, WBBM and WAMQ. CBS owned the former,=20
bought the latter, then closed one of the=20
newsrooms, Carpenter said. How does this affect=20
actors? Carpenter said media conglomerates that=20
own over-the-air networks -- Time Warner, Viacom,=20
NBC/Universal, and News Corp. -- program the=20
cable channels and local stations they also own=20
with reruns of their network shows. "If there=20
were meaningful ownership rules in place," he=20
added, "there could be new and original work that=20
could provide additional work for actors."=20
Carpenter also said consolidation can lead to=20
reduced job opportunities for commercials,=20
particularly at radio stations; many actors in=20
the Midwest, he added, support their theatrical careers by working in radio.
http://www.backstage.com/bso/news_reviews/unions/article_display.jsp?vnu...
ntent_id=3D1002690575
* Concern Grows Over FCC's Looming Media-Ownership Rules
http://www.radioandrecords.com/Newsroom/2006_06_19/concerngrows.asp
* MAP Says FCC's Martin Not Paying Attention to Public on Consolidation
Media Access Project President/CEO Andrew=20
Schwartzman said, "We are disappointed that=20
Chairman Martin thus far seems to be giving=20
inadequate attention to the intensely held views=20
of the American public on the issue of media consolidation."
http://www.radioandrecords.com/Newsroom/2006_06_19/mapsays.asp

TIME TO STOPBIGMEDIA, SAY ACTIVISTS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Groups including Consumers Union, the Newspaper=20
Guild-CWA, AFTRA, the Center for Creative Voices=20
in Media, National Council of Churches, Media=20
Access Project, Rainbow PUSH, and Free Press are=20
unveiling a new Web site, WWW.StopBigMedia.com.=20
They fear that the new media ownership rules will=20
allow media companies "to swallow up more local=20
television channels, radio stations and newspapers."
http://www.broadcastingcable.com/article/CA6345517.html?display=3DBreaki...
News

DISARRAY IN AUCTION OF UNIVISION
[SOURCE: New York Times, AUTHOR: Andrew Ross Sorkin]
The auction of Univision, the nation's largest=20
Spanish-language media company, was sent into=20
disarray last night as a consortium of investors=20
led by the Mexican television giant Grupo=20
Televisa, the group tipped to win the contest,=20
missed the deadline to submit an offer,=20
executives involved in the process said. Televisa=20
let the deadline lapse, the executives said, in=20
part because an investment partner, the Carlyle=20
Group of Washington, dropped out of the=20
consortium at the last minute after an internal=20
dispute over the price that the group was=20
prepared to bid. The Televisa-led investor group=20
is still expected to submit an offer -- possibly=20
as early as today, executives involved said, and=20
Univision is likely to waive the deadline. But=20
the auction may not end up being the fierce=20
bidding battle that some investors expected when=20
Univision put itself up for sale in February.=20
While other media companies and investment groups=20
have considered making offers, as the auction=20
deadline neared only one other bidder=20
emerged. People close to the auction said a=20
group that included the private equity firms=20
Madison Dearborn Partners, Providence Equity=20
Partners, the Texas Pacific Group and Thomas H.=20
Lee Partners and the media investor Haim Saban=20
was also preparing a bid. The group was working=20
early this morning and planned to submit an=20
offer, one executive said. As with the Televisa=20
group, price seemed to be the crucial issue,=20
people close to the equity firms said. The price=20
the broadcaster may fetch is now expected to be=20
significantly less than the $14 billion privately=20
promoted by the company earlier this year. Bids,=20
if they come, are expected to be about $13 billion.
http://www.nytimes.com/2006/06/21/business/media/21univision.html
(requires registration)
* Early Univision Bids Near $11 Billion
http://online.wsj.com/article/SB115085967650186065.html?mod=3Dtodays_us_...
e_one

TELEVISION

CONSULTANTS SEE TV AD DOLLARS GROWING 7% A YEAR
[SOURCE: USAToday, AUTHOR: David Lieberman]
Forget all the talk about advertisers fleeing=20
broadcast and cable TV networks as consumers turn=20
to ad-skipping gadgets such as digital video=20
recorders and new media including Internet video.=20
Industry consultant PricewaterhouseCoopers --=20
encouraged by the spread of digital and=20
high-definition TV sets -- is boosting its=20
forecast for TV ad sales in the new edition out=20
today of its annual, widely cited five-year=20
Global Entertainment and Media Outlook. The firm=20
sees ad spending at the tried-and-true networks=20
growing at an average of 7.1% per year to nearly=20
$52 billion in 2010 and $48.8 billion in 2009.=20
That's up from last year's forecast of 5.9%=20
annual growth to $43.2 billion in 2009. =93The=20
quality expansion is going to draw people into TV=20
viewing,=94 says Mike Kelley, a partner at the=20
consultant's entertainment and media practice.=20
That's reflected in its HDTV forecast. The firm=20
now says 20 million homes will have HD sets, with=20
their top-quality video and sound, in 2009 =97 up=20
from last year's estimate of 15 million. It says=20
25 million homes will have HD sets in 2010. By=20
contrast, the prognosticators have a mixed view=20
about DVRs. PricewaterhouseCoopers trimmed=20
expectations for this year: It says DVRs will be=20
in 13 million homes by year's end, down from 15=20
million forecast earlier. But it says the total will be 35 million in 2010.
http://www.usatoday.com/printedition/money/20060621/1b_mediaforecast21.a...
htm

MCCAIN LINKS A LA CARTE TO BROADCAST FLAG
[SOURCE: Multichannel News, AUTHOR: Ted Hearn]
TV stations that refuse to allow the a la carte=20
sale of affiliated cable networks would be=20
ineligible to rely on federal regulations=20
designed to protect their broadcast programming=20
from rampant Internet piracy, according to a=20
proposal by Sen. John McCain (R-Ariz.) released=20
Tuesday afternoon. Sen McCain, an active=20
supporter of more a la carte choice for cable and=20
satellite subscribers, is planning to offer his=20
amendment Thursday when the Senate Commerce=20
Committee meets to vote on a sweeping=20
telecommunications bill (S. 2686) sponsored by=20
Sen. Ted Stevens (R-Alaska). In his original=20
bill (S. 3457), Sen McCain would have stripped TV=20
stations of their federal network-nonduplication=20
protections if they refused to permit their cable=20
networks to be distributed a la carte by cable=20
and satellite companies. Now, Sen McCain wants=20
to withhold so-called broadcast-flag protections=20
as the penalty if TV stations won't give=20
consumers the opportunity to buy programming on a stand-alone basis.
http://www.multichannel.com/article/CA6345781.html?display=3DBreaking+News
See also --
* DeMint: Shield DBS from Multicast Must-Carry
Sen. Jim DeMint (R-S.C.) is sponsoring a proposal=20
designed to ensure that a pending Senate=20
telecommunications bill would not require=20
satellite-TV providers to carry more than one=20
digital programming service provided by a local=20
TV station. Sen DeMint is hoping to offer his=20
amendment Thursday when the Senate Commerce=20
Committee meets to vote on a sweeping=20
telecommunications bill (S. 2686) sponsored by Sen. Ted Stevens (R-Alaska).
http://www.multichannel.com/article/CA6345782.html?display=3DBreaking+News

WHITE HOUSE NOMINATES THREE TO CPB BOARD
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
Word is that the White House has finally come up=20
with the three nominees to fill the vacancies on=20
the nine-member Corporation for Public Broadcast=20
board. They are said to be former Senator David=20
Pryor, Chris Boskin of KQED San Francisco, both=20
expected to be named, and conservative National=20
Review contributor Warren Bell, who is something=20
of a surprise. Pryor's nomination has been at the=20
White House since last July. He is seen as a=20
tough but fair moderate who could bring more Blue=20
State backbone to the board. Clue: He was the=20
dean of the Clinton School of Public Service in=20
Little Rock, Ark., before exiting Feb. 15. The=20
Senate has yet to receive official notice of the=20
nominations, according to a CPB source, after=20
which it will schedule a confirmation hearing.
http://www.broadcastingcable.com/article/CA6345663.html?display=3DBreaki...
News
* White House Announcement:=20
http://www.whitehouse.gov/news/releases/2006/06/20060620-1.html

LOUISIANA PASSES FRANCHISE-REFORM BILL
[SOURCE: Multichannel News, AUTHOR: Linda Haugsted]
A franchise-reform bill that will allow incumbent=20
cable operators to immediately opt into state=20
franchises has been approved by the Louisiana=20
State Legislature. The bill passed Monday, the=20
last day of the state's legislative session. It=20
must now be signed by Gov. Kathleen Blanco in=20
order to become effective. If the bill is signed,=20
new competitors will file affidavits requesting=20
certification to the office of the Secretary of=20
State. That office will have 10 days to act on=20
the request or the affidavit will automatically=20
become effective. The franchise will be for a=20
10-year term. The new providers will describe the=20
areas they intend to serve, and build-out=20
requirements are forbidden under the new law. New=20
providers must pay a franchise fee on their gross=20
revenues, remitted to local governments. The=20
amount will match that paid by the incumbent=20
video provider. But the new providers must also=20
pay 15 cents per month per subscriber to help=20
fund public, educational and government=20
production studios and equipment. The bill seeks=20
to prevent discrimination in service deployment,=20
based on the average income for an area, but it=20
also said a provider can consider technology=20
issues and construction costs when deciding=20
whether to serve an area. Discrimination=20
complaints are to be directed to the state Attorney General.
http://www.multichannel.com/article/CA6345664.html?display=3DBreaking+News

INTERNET

'NEUTRALITY' REGULATION COULD STIFLE EVOLUTION OF HIGH-SPEED INTERNET
[SOURCE: San Jose Mercury News, AUTHOR: Michelangelo Volpi, Cisco]
[Commentay] The net neutrality debate comes down=20
to this: content providers and aggregators want=20
to regulate the Internet so that service=20
providers cannot charge for different levels of=20
service among their customers. The proposed rules=20
would be akin to regulating that there cannot be=20
carpool lanes on a highway. Broadband service=20
providers who build the networks believe they=20
should be able to manage the networks for=20
efficiency, security and quality of service.=20
Broadband providers believe they should be able=20
to place intelligence in the core of their=20
network as well as the edge, or the part that=20
reaches consumers. The debates between these two=20
camps centers on whether Congress should step in=20
to create such regulation. It should not. A lot=20
is at stake for the ordinary broadband user. The=20
success of the Internet has surpassed our wildest=20
dreams. But overall, these services have been=20
relatively easy to deliver because they are not=20
time-sensitive and are not affected by congestion=20
in the network. If an e-mail takes an extra five=20
seconds to reach you, it does not matter.=20
However, you will be very frustrated if the movie=20
you are watching online is choppy. The House of=20
Representatives recently recognized that a=20
market-based approach is the correct way to go=20
with the Internet. We all agree that broadband=20
service providers should not block, impede or=20
slow any legal application or service connected=20
to the Internet. FCC Chairman Kevin J. Martin has=20
stated the FCC has the power and ability to make=20
sure this is not happening. Regulatory actions=20
are unnecessary at this point since there is no=20
existing problem or harm occurring to consumers=20
or content providers. Enacting new regulations as=20
some of the content providers propose, however,=20
would dampen the development of the Internet and=20
its future waves of innovation. Innovation has=20
been the lifeblood of the Internet and of the=20
U.S. economy for the last decade. Our nation=20
should think carefully before taking a step that=20
would stifle what will be an exciting and=20
important wave of new innovative services.
http://www.mercurynews.com/mld/mercurynews/news/opinion/14867068.htm

CDT PAPER CALLS FOR NARROWLY TAILORED INTERNET NEUTRALITY LEGISLATION
The Center for Democracy and Technology (CDT)=20
today called on lawmakers to enact narrowly=20
tailored legislation to preserve the essential=20
neutrality and openness of the Internet, while=20
leaving broadband network providers free to=20
experiment with non-neutral arrangements=20
elsewhere on their networks. The Internet is=20
fundamentally neutral, and that neutrality has=20
been critical to its unique role as an engine for=20
free speech and innovation, CDT finds in a new=20
paper. CDT found that it is vital to make a clear=20
distinction between "Internet neutrality" and the=20
more ambiguous principle of "network neutrality."=20
CDT recommends that current legislation be=20
focused specifically on the portion of broadband=20
networks dedicated to the Internet. June 20, 2006
CDT Paper: Internet Neutrality:=20
http://www.cdt.org/speech/20060620neutrality.pdf
Daniel Weitzner Paper: Internet Neutrality:=20
http://dig.csail.mit.edu/2006/06/neutralnet.html

MYSPACE TO ADD RESTRICTIONS TO PROTECT YOUNGER TEENAGERS
[SOURCE: New York Times, AUTHOR: Saul Hansell]
Starting next week, MySpace, the popular online=20
hangout, will make it harder for strangers to=20
send messages to younger teenagers. The site,=20
which has more than 70 million members, has been=20
under pressure because members are frequently=20
subjected to lewd or inappropriate messages and=20
occasionally lured into dangerous real-world=20
encounters. The site will also stop showing=20
advertisements for certain products -- like=20
online dating sites -- to those under 18. The=20
owner of MySpace, the News Corporation, has been=20
working to address concerns about the safety of=20
the many teenage users of the site, while not=20
clamping down on the freewheeling and flirtatious=20
interchanges that are the source of its appeal.=20
Next week, the site will restrict how users over=20
18 can contact those aged 14 and 15. Older users=20
sending a message asking to become friends with=20
younger users will have to enter the recipients'=20
actual first and last names or their e-mail=20
addresses, rather than simply their user names.=20
The new policy still allows people under 18 to=20
send messages to those under 16 without knowing=20
their full names or e-mail addresses.
http://www.nytimes.com/2006/06/21/technology/21myspace.html
(requires registration)

QUICKLY

FCC PROPOSES DISASTER READINESS CHECKLIST
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The FCC has proposed that TV stations,=20
associations, and other communications industry=20
sectors get together to come up with a "Readiness=20
Checklist" for disasters and other emergencies.=20
That was one of the recommendations of an=20
independent panel charged by the FCC to come up=20
with recommendations post-Katrina. The FCC is=20
seeking input on implementing all the=20
recommendations, which include better educating=20
public safety officials about communications=20
options and promoting an industry education=20
campaign about the emergency alert system (EAS),=20
including for non-English speaking and disabled communities.
http://www.broadcastingcable.com/article/CA6345640.html?display=3DBreaki...
News
* Recommendations of the Independent Panel=20
Reviewing the Impact of Hurricane Katrina on Communications Networks
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-06-83A1.pdf

UPTON: IS UNIVERSAL SERVICE FUND STILL NEEDED?
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
House Telecommunications Subcommittee Chairman=20
Fred Upton (R-MI) is asking whether the Universal=20
Service Fund (USF), which underwrites=20
telecommunications service to rural and=20
underserved areas, is still needed at all. In=20
announcing a hearing on the subject later this=20
week, Rep Upton said, "After the invention of the=20
telephone, 'universal service' policies ensured=20
hard-to-reach rural areas got phone service=20
through subsidies funded by users in urban areas,=20
where it was much cheaper to build this new=20
communication network. While this raised phone=20
prices in urban areas, it raised the value of=20
phone service by giving more people access to the=20
network. Is this subsidy still needed now that=20
the telephone network has been built? Can the=20
goal of universal service be better supported=20
with more efficient technologies like wireless?"
http://www.broadcastingcable.com/article/CA6345498?display=3DBreaking+News
For more info on the House hearing, see:=20
http://www.benton.org/index.php?q=3Dnode/2730

CARU ASKS LEGO TO MODIFY TV ADS
[SOURCE: Broadcasting&Cable, AUTHOR: John Eggerton]
The Children's Advertising Review Unit (CARU) of=20
the Better Business Bureau says LEGO may have=20
been raising "unatainable expectations" among=20
kids with its TV ads for its LEGO Racers. LEGO=20
ads show some little hands-on operation, most of=20
the toys are performing stunts "without any sort=20
of special set-up. CARU believes that this gives=20
the impression that the Racers perform stunts=20
with ease and simply when placed on the ground by=20
a child." What CARU wants LEGO to do is "feature=20
adequate amounts of product play and clearly=20
distinguish these from footage using special=20
production techniques. Additionally, any future=20
advertising should include clear demonstration of=20
method of operation for the toys."
http://www.broadcastingcable.com/article/CA6345655?display=3DBreaking+News

37 PERCENT OF EU CITIZENS LACK COMPUTER SKILLS: SURVEY
[SOURCE: Reuters]
Because they grow up playing soccer and are more=20
adept using their feet than their hands, about 37=20
percent of people living in the European Union=20
have no computer skills, with Scandinavians being=20
the most computer-literate and Greeks the least,=20
a survey showed on Tuesday.Among 16-24 year olds,=20
some 10 percent have no computer skills, while 65=20
percent of people aged 55 to 74 are unable to use the computer.
http://today.reuters.com/news/newsArticle.aspx?type=3DtechnologyNews&sto...
D=3D2006-06-20T175958Z_01_L20862739_RTRUKOC_0_US-EU-COMPUTERS.xml

CUBS A WINNER FOR TRIBUNE
[SOURCE: Los Angeles Times, AUTHOR: Michael A. Hiltzik]
The Chicago Cubs may be turning in a dismal=20
on-field performance this year, but as a=20
financial entity, it is still one of the most=20
valuable franchises in pro sports. That could be=20
important if the Cubs' owner, Tribune Co.,=20
remains under shareholder pressure to sell off=20
corporate assets or there is a wholesale breakup=20
of the media conglomerate. The possibility that=20
the Cubs might land on the market has prompted=20
speculation on Wall Street and among sports=20
experts about the team's value, with most=20
estimates settling in a range between $450=20
million and $550 million. The lower figure would=20
make the team the fifth- or sixth-most-valuable=20
franchise in Major League Baseball even though=20
the Cubs, currently in fifth place in the=20
National League Central division, haven't won a World Series since 1908.
http://www.latimes.com/business/printedition/la-fi-cubs21jun21,1,849992....
ry?coll=3Dla-headlines-pe-business
(requires registration)
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Communications-related Headlines is a free online=20
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Foundation (www.benton.org). Posted Monday=20
through Friday, this service provides updates on=20
important industry developments, policy issues,=20
and other related news events. While the=20
summaries are factually accurate, their often=20
informal tone does not always represent the tone=20
of the original articles. Headlines are compiled=20
by Kevin Taglang headlines( at )benton.org -- we welcome your comments.
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